The document in question appears to have been drafted by White
House Legislative Affairs Director Rob Nabors, and includes the
annotation ‘Post Gang of 6' which suggests it was created as
Supercommittee talks broke down.

Woodward describes the three-page document as “confidential” and
points out Obama’s apparent willingness to take on sacred cows
such as Medicare and Social Security. Specifically, the president
was open to increasing the minimum age for Medicare recipients.

Obama’s proposal called for:

Caps on discretionary spending;

Extension of the payroll tax cut;

Increase in the debt ceiling;

A sequestration mechanism if deficit reduction is not
achieved;

Reduction in spending on Medicare and non-Medicare health
programs;

Changes to Social Security taxes and benefits; and

Tax reform through simplification and elimination of
loopholes.

Some elements of this proposal are now included in the fiscal
cliff spending cuts, such as the reduction in Medicare spending.
The package would have also called for at least $836 billion in
increased revenues through unspecified tax reform.

The Obama administration’s proposal, like the Supercommittee’s
agreement, contains a sequestration mechanism. However, Obama's
sequestration appears much more politically palatable for
Republicans, at face value, than the proposal that ultimately
passed. The entirety of the spending cuts would be in Medicare
and Medicaid – not defense – and the bottom four rates of the
Bush tax cuts (10%, 15%, 25%, and 28%) would be preserved.

If Obama is as open to entitlement reform as this proposal
indicates – and Congressional Democrats go along with
potential cuts in benefits – there is a very good chance that he
and Republican leadership will find enough common ground to reach
an agreement that avoids the fiscal cliff.